Suncorp Group Announces Special Dividend Following The Sale Of Australian Life Business

  • Mar 22, 2019 AEDT
  • Team Kalkine
Suncorp Group Announces Special Dividend Following The Sale Of Australian Life Business

Financial service provider, Suncorp Group Limited (ASX: SUN) is going to pay a fully franked, special dividend of 8 cents per share in order to return around $100 million of capital to shareholders from the sale of its Australian Life Business.

The special dividend is having EX- Dividend date of 1 April 2019, the Record date of 2 April 2019 and Payment Date of 3 May 2019.

Recently in February 2019, the company sold its Australian Life Business to TAL Dai-ichi Life Australia Pty Ltd (TAL). The company expects to receive a total consideration of around $725 million from this sale. At the time of completion of the sale, the company had announced that it is expecting to return $600 million to its shareholders. Taking into consideration the special dividend announced today, now the company is expecting to return the remaining $500 million through pro-rata return of share capital and share consolidation, which required shareholder’s approval first.

For the half-year ended 31 December 2018, Suncorp Group delivered a net profit after tax of $250 Mn. During the period, The Australian Life Insurance business contributed after-tax profit of $25 million which has decreased by 50 percent reflecting reduced experience profits, partly offset by some one-off adjustments in the Wealth business. During the period, market adjustments were negative due to actual market rates which were lower than the company's longer-term investment return assumptions. Further, the total loss from discontinued operations also contains expenses of $155 Mn for write-down of goodwill and transaction and separation costs that occurred during the period.

During the half year period, the company witnessed a top-line growth of 3.2% despite a moderating banking environment, also experienced improvement in Insurance (Australia)’s underlying margins. During the half year period, the company’s net assets decreased to $13,624 Mn as at 31 December 2018 from $13,973 million at 30 June 2018. During the half year period, the company issued $600 million of subordinated debt through the Company as part of its capital management strategy, which was fully deployed to the Bank as Basel III compliant Tier 2 capital.

Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock is trading at a price of $13.440, up by 1.895% during the day’s trade with a market capitalisation of ~$17.13 billion as on 22 March 2019. The counter opened the day at $13.280 and reached the day’s high of $13.490 and touched a day’s low of $13.280 with a daily volume of ~3,501,313. The stock has provided a year till date return of 6.54% & also posted returns of -8.91%, 6.20% & 1.31% over the past six months, three & one-months period respectively. It had a 52-week high price of $15.878 and touched 52 weeks low of $12.120, with an average volume of ~ 3,484,225.


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